Rice futures studied

Spurred on by conversations with his peers at planting time, third generation central NSW rice grower Drew Braithwaite had long been searching for more innovative ways to market and trade his produce.

Supported by AgriFutures Australia, the Griffith producer was keen to use his 2016 Nuffield Scholarship to evaluate and understand rice futures markets and their potential in Australia, and to evaluate and understand branded rice products and their consumption.

What he found was a need to shore up supply and invest in value-added products as a way of improving returns and rewarding loyalty to the price pool system.

Also, with the development of branded products tailored to customer needs providing great opportunity to the industry, the aim of the game should be to make rice products as convenient a snack as the potato chip.

In partnership with his parents, Mr Braithwaite and his wife Abby run an 1100ha irrigated mixed cropping enterprise including 300ha planted to rice annually.

Eyeing alternative opportunities for the future, Mr Braithwaite posed the question ‘‘how does a producer become a price maker, to maximise profits and mitigate volatility?’’

‘‘As a rule, growers are commodity traders and are therefore at the mercy of the markets,’’ Mr Braithwaite said.

‘‘SunRice runs a pool system where growers plant their crops not knowing what the final price for their rice will be.

‘‘Indications are given, but are rarely guaranteed.’’

During his 16-week travel program, Mr Braithwaite visited Japan, New Zealand, Singapore, Indonesia, Ireland, the Netherlands, France, Israel and the United States to explore trade, milling, distribution, sourcing and marketing options in global rice production.

He studied futures markets in Chicago, Japan and China but determined that the pricing structure would not be valuable in an Australian context.

‘‘A futures market for rice is not in the best interests of the Australian rice industry as it stands today,’’ he said.

‘‘It has the potential to commoditise rice, and presents no value to the small and niche nature of the Australian rice industry.’’